And British Prime Minister Tony Blair warned that the European Union was not about to "go soft" with Tehran on the nuclear front after the election of ultra-conservative Mahmood Ahmadinejad.

"We expect Iran to honour its obligations," said Blair after the Iranian ballots, which have raised concerns about the future of nuclear talks led for the so-called E3 of Britain, France and Germany.

President-elect Ahmadinejad pledged Sunday to form a government of "moderation", saying Tehran would continue talks over its nuclear programme and reach out to the international community.

Iran -- suspected by the US of seeking to develop nuclear arms -- has frozen its fuel cycle work and is negotiating with the Europeans, keen to offer Tehran trade and other incentives in return for pledges to curb its nuclear projects.

EU foreign policy chief Javier Solana, who has also been involved in the talks along with the German, French and British foreign ministers, insisted there was no reason to change the bloc's policy of engagement with Tehran.

"We don't have any reason to change at this point of time," said Solana. "At this point I am just in a waiting mood. I want to wait and see the actions," he added.

A spokeswoman for EU external relations commissioner Benita Ferrero-Waldner echoed those comments. "We take note of what (Ahmadinejad) had to say about willingness to continue with the nuclear talks," said Emma Udwin.

"Our ambition remains to build a deeper relation with Iran and to see it regain its place in the international community."

But while EU diplomats in Brussels were in wait-and-see mode, Britain's leader took a harder line calling on Tehran to stick to its side of the bargin in the talks.

"We expect Iran to honour its obligations, and we have tried to find a way through the impasse over nuclear capabilities," Blair said in London.

"It would be a serious mistake if he (Ahmadinejad) thought that we are going to go soft on them, because we are not."

The next round of talks is scheduled for late July when the Europeans are obliged to put forward a proposal for a deal.

Ahmadinejad's win bolsters the ranks of right-wingers who argue that Iran has a "legitimate right" to press on with nuclear work, raising concerns in European capitals.

Iran was quick on Sunday to try to dispel fears its new president could doom nuclear talks with the EU with a foreign ministry spokesman saying that the country's "position will not change with the change of a president".

But Solana raised concerns about the electoral process in Iran, saying: "I have my doubts about some matters in which the elections were taking place. But in any case I want to wait and see the action."

The EU commission also voiced concern, saying Tehran should rapidly investigate charges of irregularities.

"There have been a number of allegations about voting irregularities. That's a serious matter," said Udwin.

"We believe that those complaints should be looked into swiftly and transparently," she added, while noting the elections also "took place under a number of constraints."

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